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Labour calls off push for FCA to police professionalism

Labour has called off its push for the Financial Conduct Authority to have a regard to raising professional standards in all financial sectors.

Shadow Treasury financial secretary Chris Leslie tabled the amendment to the financial services bill but withdrew it again in a meeting of the committee currently voting proposed changes.

Leslie said Labour would look at the amendment again and that it could return to it later in the Parliamentary process. Leslie said although the move was important in the wake of payment protection insurance misselling it was actually more targeted at the wholesale part of the market rather than retail, though it would apply to both.

Conservative MP Jesse Norman (pictured), an ex Barclays director, said wholesale practitioners are already subject to an “increasing burden” of demonstrating professionalism and that the amendment was “completely void”.

Leslie said he was surprised at the level of opposition to the amendment after several committee members intervened to issue warnings over the proposal. Treasury select committee member and Conservative MP Mark Garnier brought up the “fury” felt by some IFA’s over the retail distribution review. Leslie said that is why it is also important to increase accountability of the FCA, so Parliament “gets a say” in the shape of regulations.

Treasury financial secretary Mark Garnier agreed. He said: “ People who carry on important functions like roles involving people’s money are approved by the regulator and open to ongoing requirements. This amendment would also end up in a one-size-fits-all approach.”

This one-size-fits-all-approach would clash with the judgement based approach it is proposed the regulator will take.  

The amendment said that as part of the FCA’s consumer and integrity objectives the FCA will “raise standards of professionalism in financial services by mandating a training and competence regime”.

This would apply to “all approved persons exercising controlled functions regardless of financial sector” and would have seen the regulator “specify minimum thresholds of competence including integrity, professional qualifications, continuous professional development and adherence to a recognised code of conduct”. It says that the FCA achieving this aim would be “evidenced by individuals holding an annual validation of competence”.

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